Reports state that the 48-year-old has paid out large sums of money to a former friend after the unnamed man threatened to destroy her career.
The celebrity from Birmingham was told that he would spread lies about her if she did not give in to his demands for money and luxury items.
The Sun reported the claims in an exclusive article based on conversations with friends.
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West Midland Police said inquiries are moving swiftly with the force confirming: “We are investigating an allegation of blackmail of a woman in her 40s.
“We take reports of this kind very seriously.”
It was also reported that Alison Hammond even bought a £5000 BMW for the man as his demands increased.
Alison Hammond reportedly feels ‘naive’ after blackmail ordeal
She reportedly told a friend: “I’ve been so naive and feel so stupid.”
The Bake Off co-host also vowed to “tell the world” the lies, adding: “I trusted this guy who, it turns out, was only interested in my money.
“I thought he valued our friendship. I now know he only wanted me to fund his life of luxury.”
After the eight-month ordeal, Hammond decided to go to the police to “tearfully” report the issue.
She told the pal: “Out of the blue he said he could tell lies to make people think less of me. It was alarming.
“I’m a very generous person and was happy to spend money on him. I wanted to help him.”
It was claimed that Alison tried to break off the friendship with the man multiple times but that he always returned.
She allegedly told a colleague: “He sent me a message stating that if I didn’t give him £3,500 he would ruin me.
“I was flabbergasted. I’m still in shock. To have a friend seeking to blackmail and extort me is just heartbreaking.
“I had to realise I’d reached the end and go to the police.”
Alison Hammond declined to comment when approached outside TV studios in White City.